Latest news with #Balyasny
Arabian Business
13 hours ago
- Business
- Arabian Business
‘Magnet for hedge funds', the UAE could change the $4.5tr global industry
A new research on the hedge fund industry has praised the effect Dubai and Abu Dhabi are having on what now has a size of over US$4.5 trillion. 'The state of the hedge fund industry', a report by the London-based IG Prime, said the Dubai International Financial Centre (DIFC) had attracted 60 hedge funds as of September 2024, and the Abu Dhabi Global Market (ADGM) is not far behind. UAE attracts hedge funds The UAE has 'emerged as a magnet for hedge funds' and other financial institutions in recent years. Some of the world's biggest hedge funds, including Millennium and Balyasny, have opened offices in the country, while overall employment in financial services has exploded to 44,000, up by two-thirds on the 2019 figure. The report quoted an earlier IG Prime/Hedgeweek report in September last year, which found that a clear majority (62 per cent) of the hedge funds surveyed identified Abu Dhabi and Dubai as the 'challenger' hubs. These locations were expected to see the most hedge fund growth, ahead of India, Latin America and the Nordics. Proximity to allocators was a key reason, but the report also highlighted tax advantages, time zone, and lifestyle as strong reasons. 'The huge wealth of the UAE, with the Gulf home to some of the world's largest allocators to alternatives, has advanced the case for having not only traders but business development leaders in the region,' the report added. The IG Prime report said the 'lightly regulated financial centres' such as Dubai and Abu Dhabi could lead to a global change and 'increase the pressure on regulators worldwide to carefully consider the impact of any new rules'. The UAE is an area of focus for the IG Prime, and Max Hayden, Global Head of Prime Brokerage, said: 'Everyone in the industry is talking about Dubai and Abu Dhabi and we're seeing headcount in both places increase, driven by new satellite offices started by big firms and, a relatively new phenomenon, new hedge funds launching there.' Turf war with PE firms With some of the more 'traditional' hedge fund strategies failing to deliver over the last few years, investor demand for hedge funds to improve their returns has led to more of them investing in a wider array of alternatives such as private credit, private equity and private real estate. The IG Prime research shows that 70 per cent of hedge funds now invest in private markets. As many as 61 per cent say they now invest in private equity, 45 per cent in private real estate, 39 per cent in private credit/debt and 38 per cent in infrastructure. Demand for investment in private markets from investors has also been driven by a global trend toward delisting from stock markets and companies holding off on IPOs for longer. These are expected to continue driving growth for private markets in the future. Hedge funds' expansion into private markets means they are increasingly competing with private equity funds, who have also been expanding from private equity into other private asset classes such as infrastructure, private credit and real estate. Chris Beauchamp, Chief Market Analyst at IG Prime, commented: 'The growth of hedge funds has meant that there has been a crowding of trades that have traditionally worked well for them. Arguably some of the opportunities have been arbitraged away, which has driven funds to look for new ways of getting index-beating returns. Many hedge funds are seeing private markets as an answer.' Private equity is the private market asset class with the fastest growth amongst hedge funds, with 58 per cent of hedge funds saying it's the area they've most increased exposure in during the last year. Hedge fund managers are also increasing their exposure in real estate (48 per cent), private credit (31 per cent), infrastructure (30 per cent) and natural resources (34 per cent). Despite its growing popularity, higher interest rates and uncertainty about the future of markets made private equity more difficult in 2024. That may change in the second half of this year as tariff levels continue to move down from their 'worst case' scenarios. While private equity suffered in 2024, private credit has continued to grow rapidly – 31 per cent of hedge funds identified private credit as the area of greatest growth within private markets. Stricter banking regulations and the withdrawal of bank lending have made private credit an important alternative for borrowers. Beauchamp added: 'While most hedge funds see private equity as the substantial growth investment in private markets, demand for hedge funds that invest in private credit have also been particularly strong. 'The question for hedge funds is what skills they bring to bear in these private market that might give them the edge over existing participants such as PE funds. Some will be competing directly with PE and private credit funds for the same investments. Others will be hoping that they can use the current tariff-related disruption to pick up assets priced for distress.'
Mint
7 days ago
- Business
- Mint
Balyasny Taps Ex-Deutsche Bank Basis Trader Jamie Mansell
(Bloomberg) -- Balyasny Asset Management has hired Jamie Mansell, who was co-head of European government bond trading at Deutsche Bank AG until recently, according to people familiar with the matter. Mansell, who specializes in the highly leveraged bond basis trade, made over €200 million ($228 million) for Germany's biggest bank in recent years, the people said, asking not to be identified discussing non-public information. He was previously with Morgan Stanley. He will join Balyasny's macro business as an associate portfolio manager later this year, one of the people said. Mansell — who co-headed EGB with Bennit Shah — and representatives for Balyasny and Deutsche Bank declined to comment. Some of the largest hedge funds employ the so-called basis trade, betting on price differences between cash Treasuries and futures. In order to profit from the tiny gap, traders typically borrow heavily, often 50 to 100 times the capital invested. The highly popular trade has ballooned, with recent estimates putting the amount staked on such bets at about $1 trillion — about double the amount five years ago. Deutsche Bank's fixed income and currency trading unit increased revenues by 17% in the first quarter, outperforming most peers, buoyed mainly by a strong rates business. The unit benefited from high demand for European government bonds as investors shifted money from the US to Europe, as well as from the revival of its rates business in the US. Dmitry Balyasny's multistrategy hedge fund, which manages about $25 billion, has been beefing up its trading desks by hiring several investment managers, with some of them being offered potential payouts of as much as $50 million. In April, the fund delivered gains of about 1% during the volatility around US President Donald Trump's tariff announcements. (Adds details of role at Deutsche Bank in third paragraph. An earlier version of this story corrected Mansell's title in the headline and first paragraph.) More stories like this are available on
Mint
7 days ago
- Business
- Mint
Balyasny Taps Ex-Deutsche Bank Basis Trader Mansell
(Bloomberg) -- Balyasny Asset Management has hired Jamie Mansell, who was co-head of European government bond trading at Deutsche Bank AG until recently, according to people familiar with the matter. Mansell, who specializes in the highly leveraged bond basis trade, made over €200 million ($228 million) for Germany's biggest bank in recent years, the people said, asking not to be identified discussing non-public information. He was previously with Morgan Stanley. He will join Balyasny's macro business as an associate portfolio manager later this year, one of the people said. Mansell and representatives for Balyasny and Deutsche Bank declined to comment. Some of the largest hedge funds employ the so-called basis trade, betting on price differences between cash Treasuries and futures. In order to profit from the tiny gap, traders typically borrow heavily, often 50 to 100 times the capital invested. The highly popular trade has ballooned, with recent estimates putting the amount staked on such bets at about $1 trillion — about double the amount five years ago. Deutsche Bank's fixed income and currency trading unit increased revenues by 17% in the first quarter, outperforming most peers, buoyed mainly by a strong rates business. The unit benefited from high demand for European government bonds as investors shifted money from the US to Europe, as well as from the revival of its rates business in the US. Dmitry Balyasny's multistrategy hedge fund, which manages about $25 billion, has been beefing up its trading desks by hiring several investment managers, with some of them being offered potential payouts of as much as $50 million. In April, the fund delivered gains of about 1% during the volatility around US President Donald Trump's tariff announcements. (Corrects Mansell's title in headline and first paragraph.) More stories like this are available on
Business Insider
30-04-2025
- Business
- Business Insider
Millennium lured Steve Schurr with a $100 million pay package. Here's an inside look at his investing process.
The latest eye-popping headline in the hedge fund industry's talent war is Steve Schurr's move from Balyasny to Millennium and the $100 million pay package it took to poach him. Schurr, a former financial journalist at the Financial Times and short-seller who worked with legendary investor Jim Chanos, was a key part of the equities rebuild that $23 billion Balyasny has undergone. He worked alongside the firm's founder and executives, like Archana Parekh, head of Asian equities. Speaking with Business Insider at the end of 2024 about the firm's thinking about equities investing, Schurr said Balyasny tapped him to build a centralized research function for stockpicking teams that focused on primary research in addition to managing a large portfolio. Now, he'll be taking his talents to Izzy Englander's $73 billion manager after he sits out a year to comply with the non-compete clause in his contract. His pay package includes incentives that will take years to pay out, according to a person familiar with the matter. Unlike other multistrategy portfolio managers, Schurr didn't want to use alternative data like credit-card receipts to focus on "triangulating and calling quarters" by estimating a company's earnings before they're released, calling the popular investing process "a strategy of diminished expected returns" when he spoke to BI last year. In a presentation at a conference at the University of Alabama's Culverhouse College of Business this March, Schurr went into greater detail about how he finds opportunities and researches potential investments. Looking past the narrative In a recording of his presentation viewed by BI, Schurr described how he applies a short-seller's lens to long bets in his book. "You turn a situation upside down," he said, noting that "Wall Street is a perpetual optimism machine" that forces investors to dig deep to find the real valuation of a stock, not just the "narrative." He also used his experience as a short-seller to identify three buckets of stocks with "certain types of things we should never short." Those buckets are: Compounders, such as Nvidia, Tesla, and one of his holdings, Reddit. Companies with a competitive moat, such as holdings of his like Brink's and Walmart-connected gas station chain Murphy USA. Bad businesses with a recent positive change, such as Abercrombie & Fitch, which has had a multi-year turnaround under a new CEO. "I thought of the research process as an extension of the work I did as a journalist," he said, noting that "there's not a secret trove of information that no one else has access." "The best thing you can do is doing the research yourself," he said, recommending industry conferences and expert networks over sell-side-organized events and meetings with company executives and investor relations teams. He recommended data providers such as 280first, Zion Research, and BamSEC to augment the process. "Wall Street is an echo chamber," he said, and good investors look outside of the normal channels. He pointed to YouTube reviews of consumer products and Reddit forums dedicated to a specific company as places where investors could glean insights from. On a slide titled "How We Maintain Performance," Schurr outlined that his teams "thrive in obscurity" and look for stocks with less than three teams covering the name. Companies with market caps between $1 billion and $5 billion market cap have been a sweet spot for them. But duration is also critical. The ability to hold a stock through volatile markets is important, Schurr said, telling the students in attendance that "all the money to be made" is going to come from yearslong positions, not quarterly wins. "The market is going to change constantly over the next 20 years," he said, and tools like alternative data and artificial intelligence are "commoditized very quickly." "What is durable is deep fundamental equity research," he said.
Mint
29-04-2025
- Business
- Mint
Millennium Poaches Balyasny's Schurr With $100 Million Offer
(Bloomberg) -- Millennium Management hired Steve Schurr, a senior equities manager at Balyasny Asset Management, with a potential payout of more than $100 million. Schurr, who was Balyasny's senior managing director of fundamental equities, will join Izzy Englander's Millennium after a one-year garden leave, according to people familiar with the matter, who asked not to be identified discussing personnel moves. Representatives for both firms declined to comment. Schurr, 54, also declined to comment. Dmitry Balyasny's hedge fund had promoted Schurr to its leadership team in 2023 amid a revamp of the stocks business after global equities head Jeff Runnfeldt exited following lackluster performance. The firm, which manages about $24 billion, has since added several portfolio managers, offering potential payouts of as much as $50 million. Such compensation packages are typically paid over several years and are linked to performance and subject to clawbacks. Multimillion-dollar payouts have become more common as multistrategy hedge funds, including Balyasny and bigger rivals Citadel and Millennium, compete for a limited pool of top traders. Multistrats have soared in popularity as investors seek steady returns regardless of market environment. Millennium, which manages about $73 billion and rarely posts a losing month, dropped 2% this year through March as President Donald Trump's trade war fueled volatility. Balyasny returned 3.4% this year through Friday. Several high-profile portfolio managers have changed firms this year, including Joon Park, who ran Millennium-backed Kodai Capital Management and is joining Balyasny. Kodai returned all client capital as part of the move. Schurr joined Balyasny in 2021 as a portfolio manager and later became a member of its investment committee. He previously worked at Steve Cohen's Point72 Asset Management and Jim Chanos' Kynikos Associates. More stories like this are available on First Published: 30 Apr 2025, 01:41 AM IST
